On Wednesday, Benchmark analyst at the firm raised the stock price target on J&J (NYSE:JNJ) Snack Foods (NASDAQ:JJSF) to $205 from the previous target of $195, while maintaining a Buy rating on the stock. This adjustment follows the company's announcement of its second-quarter financial results for fiscal year 2024, which were released after the market closed on Sunday, May 6, 2024.
J&J Snack Foods reported a record second-quarter revenue of $360 million, marking a 7% increase year-over-year, surpassing the consensus estimate of $341 million. The company's gross margins also impressed, reaching 30.1%, which is considered robust for what is typically a softer quarter seasonally. These margins beat the consensus estimates by 220 basis points.
The adjusted earnings per share (EPS) for the quarter stood at $0.84, showing a significant increase of 95% compared to the same quarter the previous year, and notably exceeded the consensus estimate of $0.59. Moreover, adjusted EBITDA for the quarter was $39 million, up 43% year-over-year, and was $7 million ahead of consensus expectations.
The analyst cited these strong financial results as evidence of the successful operational improvements carried out by the management team over the past three years. According to the analyst, these improvements are expected to yield a more profitable operation with above-peer sales growth for J&J Snack Foods.
Investors and market watchers may view this price target increase as a sign of confidence in J&J Snack Foods' ability to continue its positive performance and operational efficiency moving forward.
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